Broadband News

ntl talks a bit more on the caps for 2005

We mentioned sometime ago that ntl was looking at introducing capping on its products during 2005. Some more confirmation that this is likely to happen has appeared over on CableForum.co.uk.

“The usage caps will be as you mention – they are much more generous than Wanadoo’s. I think the market needs to accept that the days of unlimited
usage for all are over. The vast majority of users will not be impacted by the limits, but the small number who regularly use GB by the ton drive our costs up significantly and, since
we are not a charity, we need to recover them somehow. It doesn’t seem fair to ask the majority of moderate users to subsidise the small number of heavy users and usage caps are
the best way to ensure fair treatment for all.”

Simon Duff, ntl Chief Executive speaking to CableForum

Telewest is currently racing ahead with its upgrades to 4Mbps for customers on its cable broadband service, while still maintaining a cap free system. The introduction of capping by ntl, would
appear to be a way of ensuring their own network does not fall apart under excessive strain, rather than the pure costs per GB. ADSL is seeing a mixed approach to capping. LLU players like UK
Online now have a 500GB per month cap, which is massive compared to many caps. AOL is continuing its uncapped approach, and signs are that in late 2005 they will join the LLU crowd also. At
present there are products capped or uncapped to suit everyones needs, the question that everyone is trying to predict the answer to is whether capped products will totally replace the unmetered
ones. To a large extent the regulator Ofcom and BT Wholesale hold the key to this in the UK. If BT IPStream product pricing is forced to remain high cost per GigaByte to allow LLU and Datastream
competitors to make a profit then we will see capping remain, or as in some other countries rises in prices for unmetered products.

2005 also offers to be a year, when video content becomes more common. For example, Multicast video from the BBC. If the VoIP and Video markets are to blossom in the UK, then Ofcom needs to
ensure that the pricing for broadband connections is low enough to ensure rapid take-up. It is all very well forcing competition into perhaps 20-40% of UK households via LLU, but for many people
for some years to come the BT Group represents the only broadband access they will have.